More than half of the survey respondents said they are increasing technology investments, specifically in IT infrastructure and data analytics. Almost three-quarters reported an increase in revenues compared to last year, and 81 percent said they expect revenues to increase in 2014, which is 15 percentage points more than in 2012.

In many ways, this is an extremely dynamic time in the insurance industry, said Laura Hay, national sector leader for KPMG LLP. Those who can identify risks and create the right teams may be able to take advantage of changing conditions to expand to new markets, create and deliver new products and leverage the torrent of valuable data that is available.

Dealing with regulatory compliance and reporting demands is the top initiative requiring the most time, energy and resources this year from a management perspective, KPMG said. It also is the top issue posing a threat to their business model, and one of the most significant drivers with respect to making decisions about mergers and acquisitions.

From a technology perspective, data and analytics also are increasingly important, the survey found, as risk management ascends on the industry agenda. The regulatory landscape adds new urgency around enterprise-wide efforts around the identification, management and reporting of risks, KPMG said.

According to respondents, 25 percent said their company now has a high degree of data and analytics maturity, which represents a 5-percentage point increase over last year. The best use of data and analytics, respondents said, were risk management (37 percent), acquiring customers (35 percent), competitive intelligence (33 percent), product positioning (30 percent), operational excellence (27 percent), finance (21 percent), government regulation (13 percent), and human capital (10 percent).

The biggest challenges to implementing data and analytics, according to respondents, included: the cost of implementation and ongoing support (47 percent), a significant increase from last year, when 25 percent of respondents offered the same response; platform or technology needed to support analytics (31 percent), compared to 27 percent last year; cleansing and maintaining data integrity (29 percent), compared to 37 percent last year; complexity of analytic design to achieve end result (28 percent), which was unchanged from last year.

Modernization efforts have been hampered by efforts to meet regulatory demands and operational requirements resulting from the financial crisis that began in 2008, respondents said. Longer-term challenges presented by middleware and legacy systems identified by participants were: extensive IT implementations to modernize existing platforms, 55 percent; slower time to market and at a higher cost, 37 percent; inability to access and/or cultivate data, 22 percent; inability to integrate new acquisitions, 18 percent; no current issue in our environment, 15 percent; not sure/don't know 6 percent; other 1 percent.

Merger and acquisition activity declined markedly from last year, KPMG said; 41 percent said their companies did not have any such plans this year, compared to 32 percent last year. Merger plans, respondents said, would be driven by interest in new markets, 41 percent; to manage regulatory changes (36 percent), and gain product synergies, 29 percent.